GOOD SIGNALS

Television and radio rule the roost in the local media sector, with the Nollywood film cluster providing much support to the popularity of the former.

When casting around the newly rebased GDP figures, some of the major new categories to emerge from the ether have been those covering the entertainment industry. If the movie industry, broadcasting, publishing, and entertainment were rolled together, then they represented some 2.33% of GDP over 2013 according to National Bureau of Statistics (NBS) figures. The movie, sound recording, and music industry together represent nearly half of that GDP contribution, around 1.4%, with broadcasting, very much a related field, accounting for just over another half at 0.8%. The World Bank estimated that the media industry as a whole contributed some 7% of total GDP growth in the economy for 2013, a similar figure as for agriculture. While Nigeria's home-grown film industry, better known as Nollywood, dominates the media industry in terms of GDP contribution, other segments of the sector are also finding their niche, with some struggling to maintain market share in the face of the growing wave of internet connectivity.

As the number of smart phones rises, PwC sees that by 2018 Nigeria's entertainment and media industry will grow from some $4 billion in 2013 to $8.5 billion at an annual compound annual growth rate (CAGR) of 16.1%, with television advertising and license fees representing $1 billion and internet access revenues from mobile phones accounting for an even larger $2.2 billion. Print has long suffered in the Nigerian market, facing a harsh combination of high newsprint costs, ad revenue squeezing, low literacy rates, and the increasing power of internet news sites. In response, a number of titles have made the march over to internet-only status, hoping that through a lower cost structure they can survive.

BROADCAST THIS

With over 200 radio stations in all 36 states and the federal territory of Abuja, Nigeria has a dazzling array of content available for listeners. While private stations form the overwhelming majority in the market, the Federal Radio Corporation of Nigeria (FRCN) remains the market leader, if only because it is present in all regional markets. The FRCN also styles itself as Africa's largest radio network, with 37 stations broadcasting in 15 languages. Its international counterpart in the state sector, the Voice of Nigeria (VON), broadcasts in eight languages around the world via four shortwave frequencies, an FM station, as well as the now ubiquitous internet channel. The state governments also have another 41 stations in operation, according to the National Broadcasting Commission (NBC), with a similar number of private stations operating. There were also another 27 campus radio stations, while regulations concerning community radio stations are still under review.

The last national survey of the broadcast market performed by the NBC in February 2013 revealed that Nigerians on average listened to a total of 3 hours 56 minutes of radio broadcasts each day, just shy of the television viewing average of 4 hours 7 minutes. As radio has a lower entry cost when compared to television or internet entertainment, such high figures are not surprising. When compared to the US average of 2 hours 46 minutes for radio and just over 5 hours for television, as revealed by Nielsen in 1Q2014, the radio market in Nigeria remains strong. However, for those in the under 24 age bracket, while their radio consumption rates of some 5 hours a day remain strong, television is beginning to catch their attention, with the 18-24 age bracket reportedly watching 9.1 hours per day. If these figures are correct, then young Nigerians spend more time enthralled by their media options than they do sleeping.

In terms of key markets, the NBC survey found that privately-owned Wazobia FM was the "most preferred" station in the Abuja market, with sports-based Brila FM coming next in importance, and RayPower FM seen as the third most preferred station. RayPower FM is a part of the DAAR Communications Group, which also operates one of Africa's largest television networks, African Independent Television (AIT). In the important Lagos market, state broadcaster Radio Lagos, a state-owned broadcaster, was seen as the top preference of listeners, with Wazobia FM coming next, securing its popular position within the four key markets it operates in. Eko FM, an FRCN entity, was seen as the next most preferred, finally giving some sort of a market win for the federal broadcaster.

In terrestrial TV terms, the NBC study showed that the AIT network was by far the most preferred network, with the Nigerian Television Authority (NTA), a federal broadcaster, coming second in preference ratings. Channels TV, a news broadcaster, was the third most preferred, possibly indicating the more serious nature of viewers in the national capital. For Lagos, Silverbird TV, owned by media and real estate conglomerate Silverbird Group, was seen as the most preferred. In part, Silverbird TV enjoys high ratings through its Most Beautiful Girl in Nigeria (MBGN) pageant programs. Channels TV managed to grab the second place in the Lagos TV market, while Lagos State Television came in third. News, movies, and sports were the top three rating categories in the Lagos market in the NCB study, while for the national capital of Abuja news, drama, and entertainment took the top three spots.

While terrestrial TV broadcasters still enjoy wide viewership, cable and satellite operators are looking to break into the scene. However, the need to install infrastructure to serve customers is acting as an obstacle to sector growth, as is the problem of multiple connections as signals are distributed to a series of illegal transponders. Despite these difficulties, Nigeria has managed to produce two international broadcasters of merit, the previously mentioned AIT and Manaj Broadcast International (MBI), which are looking to raise the bar in the market.

NOLLYWOOD: A GLOBAL PROTAGONIST

Nigeria's film industry, aptly dubbed Nollywood in a play-on-words highly reminiscent of its more illustrious contemporaries Hollywood and Bollywood, is growing exponentially and set to take the main stage in the global film industry. According to a study conducted by UNESCO in 2013, Nollywood has already surpassed Hollywood to take second place after Bollywood in terms of sheer output per annum, producing an average of 50 movies per week. Although lagging behind these two in revenue generation, Nollywood has been lauded as one of the important drivers of Nigeria's GDP growth after rebasing. It was the first time that the industry was included in the GDP calculation, turning out to contribute 1.2% to Nigeria's GDP and employing over a million people, which makes Nollywood the second largest employer in Nigeria after agriculture. The World Bank has noticed the enormous job creation potential and has embarked on a Growth and Employment in States project, which should see the entertainment industry blossom even more, potentially creating a further 1 million jobs. Arguably the main strength of Nollywood movies is their low cost of production, which averages between $25,000 and $70,000, according to the BBC. Production time is generally very short and will take up to a month, after which the movies are released mostly on informal markets, where they are profitable within only two to three weeks of release. However, filmmakers face a threat that has long since been troubling their Indian and American counterparts: piracy. According to World Bank estimates, only one out of every 10 copies sold is legitimate, and the lion's share of the copies that are being exported are illegitimate. Confronted with a huge loss in revenues as a result of piracy, Nollywood's filmmakers have identified the Internet as a somewhat unlikely savior. It is hoped that through online distribution and streaming services, which could both cater to a massive market given the enormous amount of smartphones and tablets in circulation in Nigeria, Nollywood will succeed in retaining its revenues and grow ever more important as a job and wealth creating sector for Nigeria.